A Tangled Tale of Church, Taxes and Local Politics

Questions loom over handling of Wimberley Baptist Church on Hays County tax rolls

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By Charles O'Dell, Ph.D.

Hays County Precinct 3 Commissioner Will Conley, who lives in Wimberley, wants county taxpayers to purchase from Wimberley Crossroads LLC, the old First Baptist Church property in Wimberley for a cool $2.4 million, spend $600,000 more on renovations and convert the church sanctuary into a combination Precinct 3 county government center and Wimberley city hall.

There are unsettling, even unsavory circumstances surrounding this project that county taxpayers, Wimberley citizens and members of the First Baptist Church need to know about. What follows is based on official records obtained through open record requests.

It began two years ago as a questionable church insider transaction, but quickly turned into favorable tax treatment by the Hays County Central Appraisal District, and two years later an attempt by Precinct 3 Commissioner Conley to make a killing for the LLC insiders at taxpayer expense.

The church sale

According to public records, the Wimberley First Baptist Church (WFBC) on July 25, 2006, sold all of its church property located on 6.5 acres at 501 Old Kyle Road to Wimberley Crossroads, LLC for $350,000 in cash and a note for $1 million.

Wimberley Crossroads LLC consists mostly of Wimberley insiders, some of whom are reported to be members of the WFBC, so the sale can’t be considered “arms length.” As if to emphasize that, Michael D. Stevens, a Wimberley attorney represented both sides of the transaction between WFBC and Wimberley Crossroads LLC.

Martin. T. Fulfer, co-manager of Wimberley Crossroads LLC, holds a 30 percent interest in the church property. His Wimberley realty company, Star Realty, is handling the proposed $2.4 million sale to the county and stands to receive a six percent commission.

Making tax deals

The sale of church property to a limited liability corporation in 2006 should have triggered a change on the Hays County Central Appraisal District tax role from tax-exempt status to taxable property.

In the two years following the sale, the Appraisal District taxed the LLC for only the appraised land value, and that value remained constant since before 2005, at $369,210. How, one might ask, could the LLC appraised land value remain constant for more than four years while other county appraised land values rose over 20 percent?

The church property improvements were missing entirely from the Appraisal District tax rolls until June 4, 2008, when the county tax assessor, who serves on the Appraisal District board, was notified of the deficiency.

An initial District appraisal conducted on June 6, 2008, using an approved Religious Building cost calculation method, valued the total property at $3.34 million. An internal action taken by Chief Appraiser, David Valle, reduced his own appraiser’s value to $1.9 million. We found no explanation for Valle’s action documented in the official records given to us.

On July 11, 2008, attorney Michael D. Stevens, still representing both sides, protested the $1.9 million appraised value, arguing that it was more than the insider sale price.

In his cover letter to Valle dated July 11, 2008, attorney Stevens states:

“I have been waiting on the adjustment to be made and was quite surprised to see that it had been raised to well above our sales price.”

Records show the Appraisal District board did not hold a protest hearing regarding the second downward appraisal value adjustment. Instead, there was a closed door agreement reached between Chief Appraiser, Valle, and attorney Stevens, and the new appraised value was placed at $1.35 million, which included reducing the LLC appraised land value 25% to $276,910.

In response to our open records request, Chief Appraiser Valle requested a Texas Attorney General opinion on whether he must reveal actual sales documents produced by the Wimberley Crossroads LLC and used by Valle to selectively reduce the Wimberley Crossroads LLC property tax appraisal to $1.35 million.

Local politics

Wimberley Crossroads LLC is asking for, and Commissioner Conley is supporting a purchase price of $2.4 million for property the Central Appraisal District now appraises at $1.35 million. This would generate a windfall profit for the six LLC partners and cost county tax payers a bundle.

On June 10, 2008, Commissioner Conley held a public hearing in conjunction with the City of Wimberley, proposing the county purchase the Wimberley Crossroads LLC property for a price of $2.4 million in an “as is” condition. An estimated additional $600,000 would be required for renovation. More than $10,000 of public funds have already been spent by the county and Wimberley for so called due diligence.

Following eight months of his “due diligence” and behind the scene discussions, Conley called for a public meeting on June 7, 2008, to reveal his “vision” for county taxpayers.
About a dozen members of the public attended, as did a half dozen First Baptist Church insiders and an equal number of public officials. These included Hays County Sheriff Allen Bridges, Tax Collector Luanne Caraway, Precinct 3 Constable Darrell Ayers, and of course, Commissioner Will Conley.

At a minimum this proposed purchase brings into serious question Commissioner Conley’s judgment. It also raises real questions about his intentions. Fortunately for county tax payers, Conley hasn’t yet persuaded his commissioners’ court majority partners, Barton and Ingalsbe, to go along with this outlandish project.

How Conley runs his car wash in San Marcos is none of our business, but how Commissioner Conley spends our tax dollars certainly is, and I vote no.

This sorry episode also raises serious questions about how our Chief Appraiser is conducting the county’s business, and whether ordinary tax payers are carrying a larger share of the tax burden than those with connections.

The deal with church insiders is for FBC members to straighten out among themselves.

We believe there is more to this tale of church, taxes and local politics, and we will keep digging.

As co-founder of Hays Community Action Network (HaysCAN) in 2003, Mr. O’Dell strives to carry out the mission of ensuring open, accessible and accountable government. He is a long time and close observer of the workings of the Hays County Commissioners Court. He earned a degree in Agricultural Education and a Masters in Ag Economics at Texas Tech, and, later, a Ph.D. at The University of Maryland while employed as a Research Economist with the U.S. Department of Agriculture (USDA) in Washington, D.C. Texas born and raised on a family farm, O’Dell is a Hays County Master Naturalist and a board member of the Ethical Society of Austin.